Why is the NYCERS Retirement Option Letter Taking 12 Months?

At the July 2023 NYCERS Board meeting NYCERS staff briefed the Trustees that the lead time for retirement option letters (see below) was 12 months. This is a big service problem.

I’ve previously posted about this problem in December 2019 when the lead time was six months as opposed to the target of 3 months. The NYCERS budget was $62.7M in FY-2018. It was $146.4M in FY-2023.

How did this problem become worse?

NYCERS has become devoured by an out-of-control IT project and has lost focus on providing service to members and retirees.

As reference, below is a chart of the NYCERS admin budget since 2018

NYCERS Staff and Budget FY-2018 to FY-2024

Year	Full Timers	Part Timers	Temp-Hourly	PS Expenses	OTPS Expenses	Fringe Expenses	Total Expenses
2018	415	35	0	$31.7	$21.8	$9.1	$62.7
2019	428	35	0	$33.6	$43.5	$10.3	$87.5
2020	438	27	16	$35.3	$45.9	$10.7	$91.8
2021	474	27	16	$36.8	$50.2	$11.3	$98.3
2022	483	30	16	$39.5	$84.5	$11.8	$135.8
2023	485	30	16	$43.0	$90.4	$12.9	$146.4
2024	501	30	16	$54.3	$98.0	$13.8	$165.9

Retirement Option Letter

When a NYCERS member is planning to retire, he/she usually visits the customer service center on Jay Street in downtown Brooklyn around 60 days before his/her retirement date. He/she files a retirement application and sits with NYCERS staff person to be briefed on the procedure.

One of the things the NYCERS agent does is give the member a printed estimate of the member's "maximum" retirement benefit amount along with reduced amounts for option selections for a given beneficiary. The estimate, however, is not adequate to allow a member to make an informed option selection.

Choosing an option rather than a maximum benefit allows a member to leave continuing benefit to a designated beneficiary after the member dies.

With a maximum choice NYCERS stops payment of the full benefit amount when the retiree dies. If the member chooses one of the option amounts, NYCERS will continue to pay a benefit to the beneficiary that the member designated when he/she picked an option choice.

This maximum/option election occurs after the member receives the final option letter. The members have 60 days after the date of the letter to make his/her choice. Currently, NYCERS is informing members that it will take about twelve months for NYCERS to send the member a final option letter on the annual retirement benefit along with the reduced amounts associated with option benefits that member can select in place of the full benefit.

As of 2005, NYCERS was quoting a three-month period for sending a final option letter to members who were retiring.